from The Age
INTEREST rates might be rising and food and fuel prices soaring, but it is going to take much more than that to wrest a woman away from her favourite lipstick. Industry experts, including Steve Ogden-Barnes of the Australian Centre for Retail Studies at Monash University, say cosmetics is one category that is “recession-proof”. “When things get tight, people might put off buying the new plasma or the new sofa, but there is no way a woman is going to leave the house without her make-up on,” he says.
In fact, there is a widely held belief that when times get tough cosmetic sales not only survive but thrive. They call it the “lipstick indicator”. Originated by Leonard Lauder, chairman of the Estee Lauder Group, in the wake of the 9/11 attacks when lipstick sales in the US doubled, the theory goes that when things get tough women seek comfort in feel-good items. And while they may not be able to afford a $3000 handbag, they will fork out up to $30 for a lipstick.
Amy McCartney, 28, was in Myer yesterday surveying a “show-stopper copper” eyeshadow on a ground-floor discount stand. Eyeshadow and foundation are her weaknesses, she says. “I like the way they make me feel — I need it. “We have a mortgage, but interest rates going up will not stop me buying make-up.”
For those who believe in the “lipstick indicator”, things don’t augur well for the Australian economy. Jo-Anne Mason, director of leading beauty industry analyst BU Australasia, says that despite the latest interest rate rises, cosmetics sales are strong. Recent sales figures showed strong growth, with some key brands rising 30% to 40% compared with last year.
Last year, the Australian cosmetics market was valued at $2.7 billion, with sales up 5.8% on the previous year, according to Ms Mason. And more growth, about 4%, was expected this year. “Despite the downturn, there is a commonly held belief that cosmetics do well in tough times because if we can’t afford the big things then we’ll spoil ourselves with little luxuries,” Ms Mason says. “So you may not go out and splurge on a new outfit, but a new Christian Dior lipstick will make you feel great.”
Mr Ogden-Barnes says cosmetics have such brand loyalty that most women do not “trade down” when things get tight. This was true for Ava Gordon, 22, of Berwick, who was shopping in the Bourke Street mall yesterday. “No way would I stop buying make-up,” she says. “I don’t need to wear it for work but I do. I would rather stop buying lunch than go without my make-up and perfume.” Ms Gordon said she buys new products once a month and spends between $100 and $200 at a time: “I really like perfume and that tends to be expensive. If I want a pick-me-up I might buy a lipstick.”
David Jones chief executive Mark McInnes says he believes the store’s cosmetics category will “continue to grow”, despite predicting a slowdown in other departments. He says cosmetics are the only category that is “completely downturn-proof”. Inside David Jones’ Bourke Street store, Elizabeth, 60, of Geelong, had bought some eyeliner and mascara before meeting her daughter at the football. “Make-up makes me feel good and I am old, don’t forget,” she says with a laugh. “I need it”.
Natasha Iskander, of South Melbourne fashion and beauty boutique Crimson Phoenix, agrees. She says that while fashion sales have slowed sales of cosmetics have surged. “Clothing has been pretty slow the last few months with people really beginning to pinch their pennies both ways … but we’ve found there has been a real spurt in make-up sales, particularly those little items that don’t cost much but can make you feel a bit special.”
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